Abu Dhabi’s sovereign wealth fund Mubadala Investment Company has offloaded a A$363 million ($273 million) share in Oil Search, which has major stakes in Papua New Guinea’s emerging liquefied natural gas (LNG) sector.
The Australian Financial Review (AFR) reported today that investment bank Citigroup bought the stake and was in the market offloading the block of 94 million shares – or 4.5% of the Australian-listed company – to institutional investors.
The shares were being offered to funds at A$3.865 each, which marked a 1.4% discount to Oil Search’s A$3.92 last close, reported the AFR.
Bankers told the AFR that the time was right for Mubadala to offload its shares on the back of rising oil prices and the wealth fund’s apparent waning interest in Oil Search in the past year or so.
The Financial Times reported in April that Abu Dhabi’s most active investment fund was turning away from its roots as it cuts its holdings in energy and other commodity-related assets while ramping up investments in technology, healthcare and disruptive industries.
Khaldoon al-Mubarak, Mubadala’s chief executive, told the FT that the $232bn fund’s strategy shift would mean more sell downs in “legacy commodity sectors” either through market listings or private placements.
In April last year Mubadala declined to tip into Oil Search’s $S700 million placement and entitlement offer, diluting its 12.9% holding to 9.46%. Since then its commitment to Oil Search has been in question. Today’s sale will now take Mubadala below the 5% substantial shareholder line.
Energy Voice reported last year that Mubadala Petroleum had put its Southeast Asia portfolio up for sale for $2 billion. The Abu Dhabi-based company will be following in the footsteps of ExxonMobil, Chevron, Shell, Murphy Oil, Hess, Repsol and Eni, all of which are looking to sell assets in the Asia region.